World Floating Production Market Forecast 2015-2019

Douglas-Westwood’s new World Floating Production Market Forecast 2015-2019 forecasts that despite the current low oil price environment, between 2015 and 2019 $81 billion (bn) will be spent on FPS units – an increase of 73% compared to 2010-2014. The value of annual installations is projected to grow from nearly $12bn in 2015 to $21bn in 2017 before declining to $17bn in 2019. Projects already ordered will account for much of this spend.

Floating Production Deployment Spend to total $81 Billion 2015-2019 but Orders in Decline

Douglas-Westwood’s new World Floating Production Market Forecast 2015-2019 forecasts that despite the current low oil price environment, between 2015 and 2019 $81 billion (bn) will be spent on FPS units – an increase of 73% compared to 2010-2014. The value of annual installations is projected to grow from nearly $12bn in 2015 to $21bn in 2017 before declining to $17bn in 2019. Projects already ordered will account for much of this spend.

Despite Capex growth, the outlook this year for orders is poor. The low oil price is expected to impact the market, leading to a number of delayed project sanctions. This can be seen in the declining number of orders for 2015 and subsequent installation decline in 2018. Projects already under construction are unlikely to be affected.

FPSOs represent by far the largest segment of the market both in numbers (87 installations) and forecast Capex (81%) during 2015-2019. TLPs account for the second largest segment of Capex (9%) with FPSSs third (7%).

Latin America will see nearly a third of the 110 installations forecast and 32% of the projected Capex. Asia accounts for nearly a quarter of forecast installations, but only 13% of spend. Africa is important in value terms, with 22% of the projected Capex. Western Europe is expected to form 15% of forecast spend. Deepwater expenditure will make up 68% of the global FPS market.

Financing remains a challenge for leasing contractors and smaller E&P companies as a result of the lower oil prices. Low oil prices have placed additional strain on company budgets and greater efforts are being made to ensure delays and cost over-runs are avoided. Local content requirements are also pushing up prices and extending lead times, particularly in Brazil.

The World Floating Production Market Forecast 2015-2019 report is now in its 13th Edition and is supported by analysis, insight and industry consultation and includes:

Drivers & indicators – a review of factors influencing the floating production market including global energy demand; continued development of offshore reserves; oil & gas prices, supply & demand; Brazilian activity, the role of deepwater.

Operator analysis – Capex for the leading FPS operators, historic, forecast and by region and water depth.

Unique and proprietary data – updated year-round from published sources and insight gained from industry consultation.

Detailed methodology – analysis is based on DW’s in-house Oil & Gas database which details around 700 FPS projects. The data feeds into the market model to generate forecasts of floating production systems in each region of the world. Expenditure is allocated both to year of order and year of installation

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The complexity and flexibility of DW’s models enables us to cut outputs in a number of different formats. DW is able to provide different segmentation or additional granularity if required at an additional cost. Please contact DW to discuss further research@douglaswestwood.com or call +44 203 4799 505 for more details.

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